Company administration is directed at rescuing companies as going concerns. Administration can, since the Enterprise Act 2002, be commenced without a court hearing, although a number of formalities must be adhered to and the option of a court hearing still remains. An administrator can be appointed by the company or its directors, the holder of a floating charge or by an administration order of the court.

The three main objectives with administration are, in this order:

  • to rescue the company as a going concern; or
  • to achieve a better result for the company's creditors as a whole than would be likely if the company was wound up; or
  • to realise property in order to make a distribution to one or more secured or preferential creditors.

While a company is in administration there is a moratorium on creditor actions and no resolutions may be passed for the winding up of the company.

Legislative provisions for administration can be found in Part II and Schedule B1 of the Insolvency Act 1986.

The rules for administration are contained in the Insolvency (Scotland) (Company Voluntary Arrangements and Administration) Rules 2018.